The pandemic hit has hit the advertising revenue of Twitter by the pandemic in such a hard way. The company also added that the US civil unrest during May and June made this matter even worse. The advertising revenue of Twitter decreased by 15 percent year over year during the last three weeks of June.
This is because brands either slowed or entirely stopped spending on their advertisements. During its Q2 2020 earnings report, Twitter said that the demand slowly improved when brands returned after protests have already subsided.
Moreover, brands have been known to block ads from appearing terms such as “George Floyd” and “Black Lives Matter.” In addition to this, several huge advertisers such as Unilever, Starbucks, as well as Coca-Cola paused all its advertising across most social media platforms in June. The pause on advertising was initially done over concerns about hate groups on Facebook. However, these advertisers expanded to other social media platforms. This happened during a time that companies may have wanted to limit their spending as well.
The Bright Spot of Twitter was a Record For Daily Users
The tech giant said that the advertising revenue of the platform has been improving since its low point at the very beginning of the pandemic. However, this data was measured without considering the months of late May to mid-June.
There was also a gradual and moderate recovery. Still, the recorded improvement, according to Twitter, is not enough to make up for what the company has lost. The total revenue of this platform fell by 19 percent during its second quarter. This once again pushed the company into the red. This is the company’s second loss in a row after being continuously profitable since the end of 2017.
Advertisers were tightening their budgets as the COVID-19 pandemic forces consumers, specifically in the US, to stretch their spends as well. This meant fewer ad sales for the social media giant. Notably, in-platform advertisements are Twitter’s primary source of revenue. Furthermore, the platform’s advertising revenue decreased by 23 percent compared to the same quarter last year.
Twitter’s problems began last quarter after the pandemic hit during the final weeks of the reporting period of the platform. What happened was enough to wipe out a total of $20 million to $80 million in expected revenue. Besides, it eliminated all the growth in ad revenue over the prior year. During the time, Twitter declined to estimate the total amount that it might earn in the second quarter, considering all the uncertainties caused by the pandemic.
Twitter Highlights the Growth In Its Number of Users
One bright spot that Twitter is noting is the increase in its number of users during the pandemic. From people wanting to know where to buy Twitter Followers, the process is unstoppable. The company grew from 166 million before the quarter to 186 million daily active users. This growth is also reflecting the year over year growth, which is approximately 139 million since the platform began reporting daily users in 2019. Twitter’s decision to publish daily users was made because its prior user statistics, as well as monthly users, kept going down.
Making up for the failing ad revenue, Twitter is currently working on a new feature that aims to make money. On a phone call with investors, Jack Dorsey, the CEO of Twitter, said that subscriptions and commerce as possible opportunities are being planned. In addition to this. Helping sites managed paywalled access to stories are also being considered. Furthermore, Dorsey said that Twitter users would likely see some tests this year. Besides, the struggles brought by the COVID-19 pandemic also came as Twitter faces down two more severe threats.
Twitter Followers Marketing Threats
The first threat came from the unprecedented hack incident this month. This incident breached dozens of high-profile accounts on Twitter. The hacked accounts include the statement of former US President Barack Obama, former US Vice President Joe Biden, Amazon CEO Jeff Bezos, as well as Tesla CEO Elon Musk. On the other hand, the additional threat that the social media giant faced is the eyes of activist investor Elliot Management. Earlier this year, the said activist investor tried to push out Dorsey from his position as the Twitter CEO.
Moreover, Tesla CEO Elon Musk voiced out his disappointment about the hacking incident on the platform itself. In a tweet published last July 25, the Tesla CEO said that the platform sucks. Still, he noted that he does not mind if hackers accessed his direct messages. According to him, people could probably cherry-pick some sections of his DMs that don’t sound good out of context. However, he then added that his DMs mostly consist of swapping memes.
Furthermore, Twitter and Elliot eventually agreed on revenue targets and user growth. This would keep Dorsey in his position. However, Twitter will likely miss the revenue targets that were set, considering the severe impacts caused by the COVID-19 pandemic.
There is no doubt that a lot is affected by the fatal COVID-19 pandemic. Hundreds of businesses and establishments were forced to close down due to the pandemic-brought lockdown restrictions. Companies, regardless if they are big or small, were also severely affected. For instance, Twitter lost millions from its revenue as advertisers on the platform cut their spendings. And because advertisements within the platform are Twitter’s primary source of income, it cannot be denied that the platform lost so much.
This is the primary reason why Twitter CEO, as well as its investors, decided to find new sources of revenue. And a Twitter subscription platform might be one of the bests solutions to earn back the millions of income that is lost. However, a subscription platform for Twitter might be more complicated than we could ever think of. But this complexity will only be witnessed once the social media giant has already released the subscription platform.